How To Make Car Insurance Cheaper for Young Drivers

Summary: If you are a young driver or have one in your family, premiums can be high. Having younger drivers on the same policy as their parents, shopping around, finding discounts, and getting good grades can help lower premiums. You can even take safe driving courses or raise your deductible to save on your monthly expenses. Estimated Read Time: 8 mins

The cost of car insurance for young drivers can be difficult for families. Because teens are the riskiest group to insure, premiums are high but there are ways to save money. The best option for cheap car insurance still needs to cover younger drivers in a way that protects everyone’s finances while on the road. Below, we’re looking at ways how to make car insurance cheaper for young drivers.

Parents Should Include Teen Drivers on Their Auto Policies

When looking at how to make your car insurance cheaper for young drivers, the first step should be inclusion. Keeping premiums down for teens means that in most cases, including them on your policy as a parent is the best move.

Including a teen driver on a parent’s auto policy yields multiple advantages, including the inclusion of the parent’s insurance history. Additionally, bundling discounts and savings from the parent’s policy can apply, enhancing cost-effectiveness.

Adding young drivers to a parental auto policy also means there are fewer oversights and helps foster responsible, safe driving habits.

Get the Best Car Insurance Rates by Shopping and Comparing Carriers

It’s important for teen drivers to shop around and compare insurance carriers to secure the lowest premiums. Exploring different options, including bundled discounts for multiple policies, helps identify cost-effective insurance solutions.

Additionally, comparing quotes enables a thorough assessment of coverage options, ensuring sufficient protection while keeping expenses minimal.

Low insurance for young drivers will vary based on a number of personal factors, however, the only way to know for sure that you’re getting the best deal is to compare your options.

This includes comparing bundles and discounts. Working with an insurance broker can help you find a range of options in your area to compare the best options for your auto insurance needs.

Teens With a Good Driving Record Pay Less

Everyone saves money by driving safely and keeping a clean record, but teens can arguably benefit the most. This is because they are already viewed as higher risk policies and establishing a good driving record can help both in the present and future.

Avoiding violations and accidents prevents premium hikes and qualifying for safe driver discounts can help teens and families stay safe on the road and lower premiums. Prioritizing safe driving shows responsibility and can lead to lower premiums over time.

Ask About Discounts for Teen Drivers

Asking about discounts, like the good student discount, can help lower car insurance premiums for teen drivers. Insurers often reward students with good grades, acknowledging their responsibility and commitment. By excelling academically, teens can access these discounts, cutting down on insurance costs and encouraging academic success.

Finding cheaper insurance for young drivers can also often be associated with purchasing a vehicle for teens. Multi-policy discounts are a great way to save even more for the protection your family needs when on the road.

Increase Your Teen’s Deductible (Carefully)

Raising deductibles is a potential money-saving tactic for auto insurance, but it comes with risks you need to consider. Although higher deductibles often mean lower premiums, teen drivers being prone to accidents, may find themselves needing to use the deductible more frequently.

This means that while you may save on monthly premiums, you’ll need to be prepared to pay a higher deductible in the event of a claim down the line. Be sure to evaluate your financial readiness and comfort with risk before opting for higher deductibles.

Lower Insurance for Young Drivers With Driving Classes

Enrolling in driving classes to improve skills offers teen drivers a chance to receive low car insurance premiums. Accredited driver education programs not only enhance driving abilities but also qualify young drivers for discounts from insurance providers.

By finishing recognized driving courses, teen drivers can showcase their dedication to safe driving, potentially lowering insurance premiums while promoting safer driving habits on the road.

Why young drivers cost more to insure

Insurance prices follow risk, and the numbers for new drivers are sobering. The Insurance Institute for Highway Safety (IIHS) reports that the fatal crash rate per mile driven for 16- to 19-year-olds is just over three times the rate for drivers 20 and older, with risk highest at ages 16 and 17. The Centers for Disease Control and Prevention (CDC) notes that crash risk is higher for teens ages 16 to 19 than for any other age group, that teens are at greater risk at night and on weekends, and that each additional teen or young adult passenger increases the crash risk for an unsupervised teen driver.

National crash data tells the same story. The Insurance Information Institute, using federal data, reports that drivers ages 16 to 20 were involved in fatal crashes at a rate of 42.40 per 100,000 licensed drivers in 2023, the highest of any age group. Insurers price that risk into every policy with a young driver, which is why the strategies in this guide focus on reducing risk as well as cost.

Texas licensing rules that affect young drivers

Texas uses a graduated driver license (GDL) program that phases in driving privileges. According to the Texas Department of Public Safety, a teen must hold a learner license for at least six months, be at least 16, complete a state-approved driver education course and complete the Impact Texas Teen Driver program before getting a provisional license. Until they turn 18, provisional license holders:

• May carry no more than one passenger under 21 who isn’t a family member
• May not drive between midnight and 5 a.m., except for work, school or emergencies
• May not use any wireless communication device while driving, including hands-free devices

These rules matter for insurance, too. The IIHS notes that strong graduated licensing laws, especially nighttime and passenger restrictions, are linked to fewer fatal crashes and lower insurance losses for teen drivers. Enforcing the rules at home is one of the simplest ways to keep your teen’s record clean.

What about learner’s permits?

The Texas Department of Insurance says you aren’t legally required to have insurance for a teen with a learner’s permit, but you should always tell your insurance company when a teen is learning to drive in your vehicle. If you don’t and your teen has a wreck, the company could deny the claim, void your policy or refuse to renew it. Our guide on whether permit drivers need insurance in Texas explains more.

More ways to lower the cost

Choose the right car

The vehicle your teen drives can affect the premium as much as anything else. TDI notes that it usually costs less to insure an inexpensive vehicle or one with a good safety rating. The Insurance Information Institute adds that premiums are based partly on a car’s price, repair costs, safety record and theft risk, so check insurance costs before you buy. For safety, the IIHS and Consumer Reports publish a list of safe vehicles for teens, including used models with starting prices from under $5,000 to nearly $20,000. Every recommended “Best Choice” used vehicle weighs more than 2,750 pounds and earns a good rating in the IIHS driver-side small overlap front test.

Consider telematics

TDI says that if you let your insurer track your teen’s driving with a phone app or a device in the vehicle, you’ll usually get a discount, as long as your teen drives safely. These programs also give parents useful feedback about speeding, hard braking and phone use.

Keep the car at home during college

If your teen goes away to college and your vehicles stay home, TDI notes you may qualify for a discount. If your teen takes a car to college out of state, you generally don’t need to change your policy unless the vehicle is registered in that state.

Review comprehensive on an older car

If your teen drives an inexpensive car, TDI notes that it may make sense to drop comprehensive coverage, which covers things like theft and hail, and keep collision coverage for wrecks. Keep in mind that hail is common in Texas, so weigh the car’s value against the cost of the coverage before dropping it. If the car is financed, the lender will likely require both.

An example for a Texas family

Consider a family in San Antonio adding a 16-year-old to a policy with two cars. Instead of buying the teen a newer SUV, they choose a used midsize sedan from the IIHS list, add the teen to the parents’ policy instead of buying a separate one, and ask about good student and driver education discounts. They also enroll in the insurer’s telematics program and agree on house rules that follow the Texas provisional license restrictions. Each choice may lower the premium, and together they reduce the chance of a claim. The final price still depends on the insurer, so they compare quotes before the teen’s license date.

Liability limits matter more with a teen driver

Lowering the premium shouldn’t mean cutting liability coverage. If your teen causes a serious crash, the damages can far exceed the Texas minimums described on our 30/60/25 coverage page, and your family’s assets may be at risk. Many families keep or raise their liability limits when a teen joins the policy and look for savings elsewhere.

Common mistakes

• Not listing the teen. TDI says that if there’s a new teen driver in your household, you need to insure them.
• Buying a separate policy by default. TDI notes that adding a teen to your policy is usually cheaper than buying a separate policy.
• Choosing a high-performance or very expensive car. It can raise both premiums and risk.
• Ignoring the passenger and nighttime rules. They exist because those situations are when teens crash most.
• Forgetting to ask for discounts at every renewal. Good grades, driver education and telematics discounts vary by company.

Frequently asked questions

When should I add my teen to my policy?

Tell your insurer when your teen gets a learner’s permit, and add them as a driver before they start driving on a provisional license.

Do good student discounts really help?

TDI notes that teens with good grades or test scores can get discounts that vary by company, and some can last for years.

How can I compare prices?

TDI and the Office of Public Insurance Counsel run HelpInsure.com, where you can compare auto policies sold in your area. You can also request a quote to compare options for your family.

Sources:

1. Adding a teen driver to your insurance policy?, TDI. Accessed February 2024.
Texas Department of Insurance (TDI tip article)

• Fatality Facts: Teenagers, Insurance Institute for Highway Safety (IIHS)
• Risk Factors for Teen Drivers, Centers for Disease Control and Prevention
• Facts + Statistics: Teen drivers, Insurance Information Institute (Triple-I)
• Graduated Driver License (GDL) and Hardship License, Texas Department of Public Safety
• Safe vehicles for teens, Insurance Institute for Highway Safety (IIHS)
• Nine ways to lower your auto insurance costs, Insurance Information Institute (Triple-I)
• Teen Driving, National Highway Traffic Safety Administration
• HelpInsure.com, Texas Department of Insurance and Office of Public Insurance Counsel